A court in Nairobi has stopped the takeover of TransCentrury (TC) by Equity Bank over debt.

The firm informed its shareholders and the public that the injunction took effect immediately.

It argues that the lender illegally appointed a receiver while they were still engaged in negotiations, saying it breached the law.

"We are delighted to see that the court has seen the irregularity that marred this very unfortunate and ill-intended process. We viewed the bank as a partner and have been in what we saw as positive discussions to arrive at an amicable agreement just a day before the receiver was appointed by the bank," TC Group Chairman Shaka Kariuki said.

"TransCentury is a significant business in Kenya's economic landscape, we are committed to meeting our obligation, and hence the reason why we embarked on a Rights Issue transaction at the beginning of the year," he added.

"Despite the challenging economic environment that Kenya and the world at large faces, we raised money from our shareholders and were preparing to settle on an agreement favorable to the business and the bank."

On Saturday, Equity Bank placed Transcentury and the East African Cables under receivership and administration for defaulting on Sh3.01 billion.

The lender appointed Messrs Muniu Thoithi and George Weru from PricewaterhouseCoopers (PwC) as joint receivers and managers, effective yesterday.

Thoithi is a specialist in forensics and business recovery services at PwC.

By being placed under receivership, it signaled Equity's intention to settle bad debt.

The injunction puts a stop to the appointment of the receivers and restrains them or their agents from performing any actions in their capacity as receivers of the company.

"TC Group is steered by a very resilient team and I am confident that we shall recover the time lost as we continue focusing on our mandate of impacting Africa with transformative infrastructure," said Nganga Njiinu, CEO of TC Group.

Copyright Capital FM. Distributed by AllAfrica Global Media (allAfrica.com)., source News Service English